10 Best Performing Affordable Stocks Under $40

1. Macy’s, Inc. (NYSE:M)

Price: $23.72

Forward P/E Ratio: 10.88

6-month Performance: 89.76%

Number of Hedge Fund Holders: 42

Macy’s, Inc. (NYSE:M) is one of the Best Performing Affordable Stocks Under $40. On December 30, Mike Hickey from Benchmark Co. reiterated a Buy rating on the stock without disclosing any price targets. Earlier, on December 5, Evercore ISI maintained a Hold rating on the stock and raised the price target on the stock from $14 to $21.

The positive sentiment follows the company’s fiscal Q3 2026 earnings announced on December 3. The quarterly revenue fell slightly by 0.61% year-over-year to $4.71 billion but topped estimates by $154.53 million. The EPS of $0.09 also topped estimates by $0.22. Management noted that the net sales exceeded their guidance range. Moreover, the third quarter sales were also reported to be the strongest in 13 quarters, driven by the company’s bold new chapter strategy.

Evercore ISI noted the quarter to be robust. However, the firm expressed its disappointment regarding the company’s fourth quarter same-store sales target, which Macy’s, Inc. (NYSE:M) expects to deliver -2.5% to flat growth. Evercore ISI believes that the company needs to deliver at least 2% to 3% same-store sales growth as it rolls out its Reimagine 125 initiatives to more stores in 2026 and beyond.

Macy’s Inc. (NYSE:M) is an omnichannel retail store that manages three brands: Macy’s, Bloomingdale’s, and Bluemercury. These brands sell a variety of merchandise, including accessories, apparel, consumer goods, home furnishings, and more.​

While we acknowledge the potential of M to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than M and that has 100x upside potential, check out our report about this cheapest AI stock.

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